Thursday, 26 September 2013

Netflix Expanding

Netflix recently announced a second deal with a cable company to bring its online streaming service to cable. The deal with Swedish company Com Hem would add a potential 600,000 customers to its service. This comes after Virgin Media struck a similar deal in the U.K to bring Netflix to at least 1.7 million of its customers.

The two cable providers would begin offering the service to subscribers of their respective TiVo DVR services.

While this deal may seem like big news for the two companies, Netflix and Com Hem's DVR service must have a balance to properly coexist. This is because any DVR system can undercut the streaming service provided by Netflix or vice versa. For example, if I wanted to watch an episode of Law and Order SVU, I could potentially look it up on Netflix or just have TiVo record all SVU broadcasts onto the DVR hard-drive. The TiVo service that Com Hem provides can be anywhere from twice as expensive to seven times as expensive as Netflix, and with Netflix right on the system consumers may start to think: is this service really worth it when I can just keep Netflix by itself?

Although there is a possibility of either service poaching customers from the other, both sides of the deal have inherent strengths. Com Hem's DVR service will allow viewers to stay up to date with current shows that Netflix won't have for several months. On the flip-side, Netflix has exclusive content, such as House of Cards, that consumers have interest in but may not have access to. Overall, this Netflix deal with Com Hem may just be a start to the streaming company's plans of expansion. Consider this a test run before any U.S cable providers are approached.